IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

Transcription

1 Dusane 1/71 chs IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION CHAMBER SUMMONS NO.1530 OF 2015 IN EXECUTION APPLICATION (L) NO.2481 OF 2015 IN ARBITRAL AWARD DATED 22ND JUNE, 2015 The Board of Control for Cricket... Applicant in India (Ori. Respondent) In the matter between : M/s Rendezvous Sports World. Original Applicant Vs. The Board of Control for Cricket... Respondent in India Mr. T.N. Subramaniyam, Senior Counsel alongwith Mr. A. Mehta, Mr. A. Saxena, Mr. I.D. Deshmukh, Ms. Prabhjyot Kaur Chhabra, Ms. Ayesha Talpade, Ms. Sahana Ramesh i/by M/s Cyril Amarchand Mangaldas, Advocate for the Applicant/ Respondent. Mr. Darius Khambhata, Senior Counsel alongwith Mr. Rohan Rajadhyaksha i/by. Nipa Sunit Gupte, for the Petitioner. WITH CHAMBER SUMMONS NO.1532 OF 2015 IN EXECUTION APPLICATION (L) NO.2482 OF 2015 ::: Uploaded on - 30/06/2016 ::: Downloaded on - 22/08/ :19:52 :::

2 Dusane 2/71 chs IN ARBITRAL AWARD DATED 22ND JUNE, 2015 The Board of Control for Cricket... Applicant in India (Ori. Respondent) In the matter between : Kochi Cricket Private Limited. Original Applicant Vs. The Board of Control for Cricket... Respondent in India Mr. Rafique Dada, Senior Counsel alongwith Mr. T.N. Subramaniyam, Senior Counsel alongwith Mr. Aditya Mehta, Mr. A. Saxena, Mr. I.D. Deshmukh, Ms. Prabhjyot Kaur Chhabra, Ms. Ayesha Talpade, Ms. Sahana Ramesh i/by M/s Cyril Amarchand Mangaldas for the Applicant. Mr. Navroz Seervai alongwith Mr. Rohan Rajadhyaksha, Ms. R. Barot, Mr. A. Iyer, Mr. A. Nimbalkar i/by AZB & Partners for the Petitioner. WITH CHAMBER SUMMONS (L) NO.66 OF 2016 IN EXECUTION APPLICATION (L) NO.2748 OF 2015 IN AWARD DATED 28TH JANUARY, 2015 AS AMENDED ON 16TH FEBRUARY, 2015 ::: Uploaded on - 30/06/2016 ::: Downloaded on - 22/08/ :19:52 :::

3 Dusane 3/71 chs Arup Deb and Others... Applicants (Ori. Judgment-debtors) In the matter between Global Asia Venture Company. Decree Holder Vs. Arup Deb & Others... Judgment-debtors Mr. Sharon Jagtiani alongwith Mr. Prateek Bagaria, Mr. S. Rathod i/by Nishith Desai Associations Advocate for the Applicant. Mr. Gaurav Joshi, Senior Counsel alongwith Mr. R. Panchmatia, Mr. P. Jehangir, Mr. A. Agarwal, Mr. M. Kanoria, Ms. Aastha Arora, Ms. Natasha K. i/by Khaitan & Co. Advocate for the Respondent. P.C. Coram : Smt. R.P. SondurBaldota, J. Date : 14 th June, This is a common order on the above three Chamber Summonses seeking dismissal of the applications for execution of Arbitral awards on the ground that the same are misconceived and not maintainable. The applicant in the first two Chamber Summonses and the judgment debtor in the concerned execution applications is the Board of Control for Cricket in India ( BCCI for short). It has filed applications under Section 34 of the Arbitration and Conciliation Act ( Arbitration Act for short) to challenge the very arbitral awards. ::: Uploaded on - 30/06/2016 ::: Downloaded on - 22/08/ :19:52 :::

4 Dusane 4/71 chs The applicants in the third Chamber Summons are the judgment debtors under the arbitral award dtd 28 th January, 2015 and the respondent thereto is the award holder. 2 The first Chamber Summons No.1530 of 2015 arises out of the arbitral award dtd. 22 nd June, 2015 made in favour of M/s Rendezvous Sports World ( RSW for short) in the sum of Rs.1,53,34,00,000/- along with interest and costs of the arbitral proceedings of Rs.50,00,000/-. The second Chamber Summons No of 2015 arises out of the arbitral award of the same date i.e. 22 nd June, 2015 made in favour of Kochi Cricket Private Limited ( KCPL for short) in the sum of Rs.3,84,83,71,842/- along with interest and costs of the arbitral proceedings of 72,00,000/-. The third Chamber Summons arises out of the arbitral award dtd. 28 th January, 2015 as amended on 16 th February, 2015 between Global Asia Venture Company and Reach (Cargo Movers) Pvt. Ltd. and others. 3 On 16 th September, 2015, the BCCI challenged both the awards by filing Arbitration Petition (L) No of 2015 against RSW and Arbitration Petition (L) No of 2015 against KCPL and sent intimations dtd. 21 st September, 2015 to them of filing of the petitions. The service of the arbitration petitions was however done on 4 th December, Reach Cargo has filed Arbitration Petition No of 2015, which was admitted on 19 th October, In the meantime i.e. on 23 rd October, 2015, the Arbitration and Conciliation (Amendment) Ordinance, 2015 (No.9 of 2015) (Arbitration ::: Uploaded on - 30/06/2016 ::: Downloaded on - 22/08/ :19:52 :::

5 Dusane 5/71 chs Ordinance) was promulgated by the President of India. It was published in the official Gazette on 23 rd October, 2015 and came into force from that date. On 17 th December, 2015 and 23 rd December, 2015, the Arbitration and Conciliation (Amendment) Bill, 2015 (Bill) was passed by the Lok Sabha and Rajya Sabha respectively. The Bill received assent of the President of India on 31 st December, 2015 and was notified as the Arbitration and Conciliation (Amendment) Act, 2015 ( Amending Act for short) on 1 st January, One of the major amendments to the Arbitration Act is amendment to Section 36. By the amendment, the entire Section 36 stands repealed and replaced by a new Section 36. Section 36 as it stood prior to the amendment and as it stands today read as follows: Pre-amendment. 36 ENFORCEMENT :- Where the time for making an application to set aside the arbitral award under Section 34 has expired, or such application having been made, it has been refused, the award shall be enforced under the Code of Civil Procedure, 1908 (5 of 1908) in the same manner as if it were a decree of the Court. Post-amendment: 36 ENFORCEMENT :- (1) Where the time for making an application to set aside arbitral award under Section 34 has expired, then, subject to provisions of Sub-section (2), such award shall be enforced in accordance with the provisions of the Code of Civil Procedure, 1908, in the same manner as if it were a decree of the Court. ::: Uploaded on - 30/06/2016 ::: Downloaded on - 22/08/ :19:52 :::

6 Dusane 6/71 chs (2) Where an application to set aside the arbitral award has been filed in the Court under Section 34, the filing of such application shall not by itself render the award unenforceable, unless the Court grants an order of stay of operation of said arbitral award in accordance with the provisions of sub-section (3 ), on separate application made for that purpose. (3) Upon filing of an application, under subsection (2) for stay of operation of the arbitral award, the Court may subject to such conditions as it may deem fit, grant stay of the operation of such award for reasons to be recorded in writing: Provided that the Court shall, while considering the application for grant of stay in the case of an arbitral award for payment of money, have due regard to the provisions for grant of stay of a money decree under the provisions of Code of Civil Procedure, In the affidavit-in-support of the Chamber Summons, the BCCI contends that, the applications under Section 34 of the Arbitration Act to challenge the two arbitral awards having been filed by it, prior to promulgation of the Arbitration Ordinance, the same would be governed by Section 36 of the Arbitration Act, prior to it's amendment. Therefore, the two arbitral awards will become enforceable against it, only if and when, the petitions under Section 34 are refused and not otherwise. According to it, a substantive right has accrued to it under Section 34 read with Section 36 of the Preamendment Arbitration Act of protection against execution of the awards during pendency of the applications under Section 34. Denial of this protection would result into grave and irreparable injury to it. ::: Uploaded on - 30/06/2016 ::: Downloaded on - 22/08/ :19:52 :::

7 Dusane 7/71 chs The Chamber Summonses are contested by RSW and KPCL contending that the applications under Section 34 of the Arbitration Act filed by BCCI would be governed by the Arbitration Act as amended by the Arbitration Ordinance. 5 If the Amended Act is held applicable, after expiry of three months from the date of the arbitral award, it becomes enforceable in accordance with provisions of the Civil Procedure Code, irrespective of whether a challenge has been filed under section 34 of the Act or not. Section 36(2) of the Amended Act requires the judgement-debtor to move a separate application, specifically seeking stay of operation of the award in case it wishes to seek a stay of the execution proceedings. Under section 36(3), if the Court is inclined to grant stay of operation of the award, it has to record reasons in writing and also have due regard to the provisions for grant of stay of a money decree under the Civil Procedure Code. On the other hand if the Amendment Act is held not applicable, the judgement-debtor will continue to enjoy the protection against execution during the pendency of the application under section 34 of the Arbitration Act. 6 The learned counsel appearing for both the sides to the Chamber Summonses advanced extensive submissions on the question whether the amendment under the Amendment Act to Section 36 of the Arbitration Act, applies to the petitions under Section 34 of the Act, already filed and pending as on the date of the amendment. But thereafter it was felt that since the question of law ::: Uploaded on - 30/06/2016 ::: Downloaded on - 22/08/ :19:52 :::

8 Dusane 8/71 chs under consideration, has wider implications and since there are other similar applications pending for consideration of the court, it would be only appropriate to give an opportunity to the Counsel and parties in person concerned, in similar applications, a hearing on the question of law. Therefore, the hearing of the Chambers Summonses was postponed and the office was directed to notify on the board of the Cause List, the question of law under consideration for the benefit of the members of Bar. Pursuant to that notice, the parties to Chamber Summons (L) No of 2015 in Execution Application (L) No of 2015, in Award dtd. 28 th January, 2015, as amended on 16 th February, 2015, appeared through their Counsel and made submissions on the question. Mr. Gaurav Joshi, the learned Senior Counsel appeared for the Respondent and Mr. Sharon Jagtiani for the Applicant in the Chamber Summons. 7 The Arbitration Ordinance did not contain any saving section. Consequently the initial submissions on the Chambers Summonses were essentially based upon the general propositions as regards the nature of the statutory amendments i.e. whether prospective or retrospective. However, when the Arbitration Ordinance was converted into Arbitration Amendment Act, with insertion of Section 26 as the saving section, further submissions had to be advanced in the matter, on interpretation and effect of Section 26 of the Amending Act. Accordingly, further submissions of all the counsel were heard. ::: Uploaded on - 30/06/2016 ::: Downloaded on - 22/08/ :19:52 :::

9 Dusane 9/71 chs The Saving Section 26 of the Amending Act reads as follows: : 26. Nothing contained in this Act shall apply to the arbitral proceedings commenced, in accordance with the provisions of Section 21 of the principal Act, before the commencement of this Act unless the parties otherwise agree but this Act shall apply in relation to arbitral proceedings commenced on or after the date of commencement of this Act. Section 26 is seen to consist of two parts. The first part provides that nothing contained in the Amendment Act shall apply to the arbitral proceedings commenced in accordance with Section 21 of the Principal Act before the commencement of the Amendment Act i.e. prior to 23 rd October, 2015, unless the parties agree otherwise. The second part provides that the Amendment Act shall apply in relation to arbitral proceedings commenced on or after the date of commencement of the Amendment Act i.e. 23 rd October, The term arbitral proceedings has a specific meaning and duration under the Arbitration Act, since the date of commencement of the proceedings and the date of termination of the proceedings have been specifically provided for. Under Section 21 of the Arbitration Act, unless otherwise agreed by the parties, the arbitral proceedings in respect of particular dispute commenced on the date on which a request for that dispute to be referred to arbitration is received by the respondent. Section 32(1) of the Arbitration Act provides that the arbitral proceedings shall be terminated by the final award or by an order of arbitral Tribunal under Sub-Section 2. Therefore, the term arbitral proceedings would not include post-award proceedings i.e. ::: Uploaded on - 30/06/2016 ::: Downloaded on - 22/08/ :19:52 :::

10 Dusane 10/71 chs proceedings for enforcement of the arbitral award or proceedings to challenge the arbitral award, which arise only after the award is made. It would also not include the proceedings prior to the commencement of arbitral proceedings. There is no dispute between the parties as regards the specific meaning of the term arbitral proceedings under the Arbitration Act. 9 The two parts of saving section 26 use different expressions to describe the proceedings to which they are meant to apply. The description in the first part is to arbitral proceedings and the description used in the second part is in relation to arbitral proceedings. As regards the construction, interpretation and meaning of the phrase used in the second part there is and there can be no dispute between the parties. Besides, that has been the specific subject of discussion of the Apex Court in it's decision in Thyssen Stahlunion Gmbh vs. Steel Authority of India Ltd. reported in (1999) 9 SCC, page 334 case, when the identical phrase used in Section 85(2) (a) of the Arbitration Act was discussed. At para-22.2 of the decision, the Apex Court interprets the phrase in following words :- 22 For the reasons to follow, we hold: The phrase in relation to arbitral proceedings cannot be given a narrow meaning to mean only pendency of the arbitration proceedings before the arbitrator. It would cover not only proceedings pending before the arbitrator but would also cover the proceedings before the court and any proceedings which are required to be taken under the old Act for the award becoming a decree under Section 17 thereof and also appeal arising thereunder. ::: Uploaded on - 30/06/2016 ::: Downloaded on - 22/08/ :19:52 :::

11 Dusane 11/71 chs The first part of saving Section 26 uses the phrase to arbitral proceedings which will have to be interpreted differently. It carries a restrictive meaning i.e. the proceedings before the arbitral tribunal, which proceedings get terminated with passing of the final award. There is no dispute between the parties about this restrictive meaning also. The dispute is about the effect of the use of the restrictive phrase or expression. According to the applicants awarddebtors, the use of the restrictive phrase renders the saving Section 26 non-exhaustive and therefore aid of Section 6 of the General Clauses Act has to be taken. Whereas according to the respondents- award holders, the use of restrictive phrase is not on account an inadvertent omission or lapse, but it is a deliberate and intentional omission so as to deliberately keep certain matters i.e. the proceedings post- final award, outside the saving from application of the Amendment Act. In that circumstance, by necessary implication, the saving Section becomes exhaustive i.e. it takes within it's fold all different types of proceedings arising out of the Arbitration Act. 11 Mr. Dada submitted that, since the first part of Section 26 of the Amendment Act does not provide for the post-award proceedings, the section is necessarily non-exhaustive. In such circumstances, according to him, Section 6 of the General Clauses Act becomes applicable. The relevant provision of Section 6 of the General Clauses Act reads as under: ::: Uploaded on - 30/06/2016 ::: Downloaded on - 22/08/ :19:52 :::

12 Dusane 12/71 chs Effect of Repeal--- Where this Act, or any [Central Act] or Regulation made after the commencement of this Act, repeals any enactment hitherto made or hereafter to be made, then, unless a different intention appears, the repeal shall not-- (a)... (b)... (c) affect any right, privilege, obligation or liability acquired, accrued or incurred under any enactment so repealed; or (d)... (e) affect any investigation, legal proceedings or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid; and any such investigation, legal proceedings or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed as if the repealing Act or Regulation had not been passed. 12 Mr. Dada argued that the decision of the Apex Court in Commissioner of Income Tax, U.P. vs. M/s Shah Sadiq and Sons, reported in (1987) 3 Supreme Court Cases, page 516 is authority for the proposition that a savings provision is not exhaustive of the rights that are saved and just because a right is not expressly saved by the saving provision, it does not mean that such right stands extinguished. A non-exhaustive savings clause leaves it to Section 6 of the General Clauses Act to determine which additional rights are ::: Uploaded on - 30/06/2016 ::: Downloaded on - 22/08/ :19:52 :::

13 Dusane 13/71 chs saved. According to him, unless a repealing statute expressly extinguishes a vested right or expressly affects a pending legal proceedings under the repealed statute, the accrued vested right, or legal proceeding is not affected. Since neither part of the Section 26 expressly deals with post-award proceedings and appeals arising therefrom in respect of arbitration proceedings commenced prior to 23 rd October, 2015, the general law in relation to repeal would be applicable. 13 Mr. Dada, while acknowledging the position that Section 6 of the General Clauses Act provides for Effect of repeal and the fact that the Arbitration Amendment Act, does not repeal the Arbitration Act, submitted that the same should not affect applicability of Section 6 of the General Clauses Act to Section 26. He argued that, by Section 19 of the Amendment Act, there is substitution of Section 36 of the unamended Act by Section 36 of the amended Act. The substitution of the Section would amount to, according to him, repeal of Section 36 and partial repeal of the Arbitration Act. On the subject of partial repeal of a statute, Mr. Dada relies upon decisions of the Apex Court in the case of (i) G. Ekambarappa and Others Vs. Excess Profits Tax Officer, Bellary, reported in AIR 1967 Supreme Court page 1541 and (ii) The State of Tamil Nadu and Others Vs. K. Shyam Sunder and Others reported in (2011) 8 Supreme Court Cases, page 327. In the facts of Ekambarappa's case, the appellants carried on business in partnership in Bellary Town and the partners were also residents of Bellary Town during the period the firm was carrying on business. ::: Uploaded on - 30/06/2016 ::: Downloaded on - 22/08/ :19:52 :::

14 Dusane 14/71 chs Later, the firm stood dissolved. The Bellary District was a part of old Madras State which was a Part-A State under the Constitution of India till its merger with the Mysore State on 1 st October, 1953 which was a part B State. When the Excess Profits Tax Act was first promulgated, it was extended to the territory of former British India. After the Constitution came into force, the Act was adapted so as to extend the operation of the Act to the whole of India, except, Part-B States by Adaptation of Laws Order, The result of the adaptation was that, all the provisions of The Excess Profits Tax Act, stood repealed so far as the District of Bellary was concerned w.e.f. 31 st December, It was contended on behalf of the appellants before the Apex Court that, it was not a case of repeal of The Excess of Profits Tax Act, 1940 and that the Adaptation of Laws Order, 1956 only modified the provisions of Section 1(2) of the Act and the effect of modification was that, the provisions of the Act, was no longer applicable to Bellary District which was comprised in the territory of Part-B State of Mysore. The Apex Court, rejected the contention opining that, there was no justification for the argument put forth. The result of the Adaptation of the Laws Order, 1956, so far as the Act was concerned, was that, the provisions of that Act were no longer applicable or in force in Bellary District. Thus, there was revocation or abrogation of the Act which amounted to repeal and Section 6 of the General Clauses Act, applied even in the case of a partial repeal or repeal of part of Act. In Shyam Sundar's case, the Apex Court referred to its earlier decision in State of Rajasthan V/s. Mangilal Pindwal,reported in (1996) 5 Supreme Court Cases page 60 to observe ::: Uploaded on - 30/06/2016 ::: Downloaded on - 22/08/ :19:52 :::

15 Dusane 15/71 chs that substitution of a provision results in repeal of the earlier provision and its replacement by the new provision. 14 Applying the principle in the above two decisions of the Apex Court, Mr. Dada submits that, substitution or replacement of Section 36 of the Arbitration Act, by the Arbitration Amendment Act amounts to repeal of Section 36 and therefore the provision of Section 6 of the General Clauses Act, which operates in the situation of repeal of a Statute, becomes effective and applicable. 15 In view of the two clear decisions cited and even otherwise, I am inclined to agree with Mr. Dada that, substitution of Section 36 of the Arbitration Act by Section 36 of the Arbitration Amendment Act, amounts to repeal of Section 36 and part repeal of the Arbitration Act. However, that by itself will not be sufficient to attract the provision of Section 6 of the General Clauses Act to it since it becomes applicable only in the absence of a different intention appearing in the repealing Act. In other words, if the provision inadvertently or erroneously leaves something unattended to, the general provision of the General Clauses Act needs to be resorted to. If the Saving Section is seen to take within it's fold, all types of proceedings either expressly or by necessary implication, there can be no resort to the General Clauses Act. 16 Mr. N.H. Seervai, the learned Senior Counsel appearing for KCPL submitted on the other hand, that, the Saving Section 26 of ::: Uploaded on - 30/06/2016 ::: Downloaded on - 22/08/ :19:52 :::

16 Dusane 16/71 chs the Amending Act, in fact is very clear and complete in itself and does not need aid of the General Clauses Act. According to him, on a bare reading of Section 26 of the Amending Act, it is ex-facie clear that the provisions of substituted Section of 36 of the Arbitration Act are applicable in cases where a petition under Section 34 of the Arbitration Act has been filed before 23 rd October, He refers to the use of the phrase to the arbitral proceedings in the first part of Section 26 in contradistinction to use of the phrase in relation to arbitral proceedings in the second part. He argued that, this language deliberately employed by Section 26 of the Amendment Act would mean that it is only the arbitral proceedings, themselves i.e. the proceedings before the Arbitrator, which have commenced prior to 23 rd October, 2015, that have been kept out of the applicability of the amendments made by the Amending Act to the Arbitration Act. Therefore, by necessary implication, the amendments made will apply to the proceedings other than the arbitral proceedings under the Arbitration Act, even though the said proceedings may have commenced prior to 23 rd October, This submission was adopted by Mr. Darius Khambhata, the learned Senior Counsel for RSW and Mr. Sharon Jagtiani for respondent in the third Chamber Summons. 17 The decision of Shah Sadiq's case relied upon by Mr. Dada arose out of repeal of Income Tax Act, 1922 by Income Tax Act, In the facts of that case, the assessee, a registered firm, suffered losses in Assessment Years and but made profit in ::: Uploaded on - 30/06/2016 ::: Downloaded on - 22/08/ :19:52 :::

17 Dusane 17/71 chs in speculation business. In the assessment proceedings for , the assessee claimed that the losses suffered in the previous years should be set off against the profit made in the succeeding year in view of Section 24(2) of the 1922 Act. The ITO rejected the claim by applying Section 75(2) of the 1961 Act. The 1961 Act, which came into operation on 1 st April, 1962 did not provide for such a right. It provided an entirely new scheme under Section 75. The decision of the ITO was carried further to the higher courts. The Apex Court held that the right given to the assessee for the year under Section 24(2) of 1922 Act was an accrued right and a vested right. It could have taken away expressly or by necessary implications. This was not done so by Section 297, the savings Section of 1961 Act. Thus the savings clause under Section 297 of the 1961 Act was held not exhaustive of the rights which were saved or which survived the repeal of the statute under which, such rights had accrued. The Apex Court held that whatever rights are expressly saved by the saving provisions stand saved. But that does not mean that the rights that are not saved by the savings provisions are extinguished or stand ipso facto terminated. The rights which are accrued are saved unless they are taken away expressly. Section 6 (c) of the General Clauses Act saves accrued rights unless they are taken away by the repealing statute. 18 The Apex Court in Shah Sadiq's case does not lay down an absolute proposition that a right or legal proceedings must be expressly saved or taken away by the saving provision. At para 15 of ::: Uploaded on - 30/06/2016 ::: Downloaded on - 22/08/ :19:52 :::

18 Dusane 18/71 chs the decision, the Apex Court held that in the case before it, the savings provision in the repealing statute was not exhaustive of the rights, which are saved and which survive repeal of the statute under which such rights had accrued. It does not rule out the possibility of repeal by necessary implication. In fact this is recognised also by Section 6 of the General Clauses Act, which is applicable only when a different intention does not appear from the Act. It is, therefore necessary, to see whether a different intention can be said to appear from the section of not saving the post-award proceedings filed prior to 23 rd October, The first test to determine that, would be the language of the section. The intention of the legislature is primarily to be gathered from the language used. The statute must be read as it is. This means attention must be paid to what has been said as also to what has not been said. Whether the omission in the first part is conscious and deliberate or whether it is inadvertent, unintentional, erroneous is to be seen. Unless indicated otherwise, the language of the provision i.e. use of a specific word or phrase or expression must be held to be deliberate and conscious. The Legislature must be presumed to know what it is doing and transacting it's business correctly. Therefore, use of restrictive phrase in the first part in contradistinction to the use of wider phrase in the second part of Section 26 must be held to be intentional and with specific purpose i.e. to restrict the saving to arbitral proceedings and anything that falls outside arbitral proceedings is not saved. ::: Uploaded on - 30/06/2016 ::: Downloaded on - 22/08/ :19:52 :::

19 Dusane 19/71 chs The decision in Thyssen's case has been referred to by both sides for interpreting the phrase in relation to. In order to correctly appreciate the decision, it is necessary to notice the facts of that case. Thyssen had filed a petition in Delhi High Court under Sections 14 and 17 of the Arbitration Act, 1940 for making award rule of the court. Upon receiving notice of the petition, the respondent, Steel Authority of India had filed objections to the award under Section 30 of the Act. Thyssen later changed the stand and filed an application for execution of the award under the new Arbitration Act, By then, the time limit to set aside the award under the new Act had elapsed. The ground taken by Thyssen was that the Arbitration proceedings had been terminated with the making of the award on 24 th September, 1997 and therefore the new Arbitration Act, 1996 was applicable for enforcement of the award. The respondent opposed the maintainability of the Execution Application. In these facts, the Apex Court was required to consider the question whether the award would be governed by the new Act for it's enforcement or whether provisions of the old Act would apply. For that purpose, the Apex Court considered Section 85 of the new Act, which was for repeal and savings. It noticed that the relevant Section 85(2)(a) of the new Act is in two limbs: (i) provisions of the old Act shall apply in relation to arbitral proceedings, which commenced before the new Act came into force unless otherwise agreed by the parties and (ii) a new Act shall apply in relation to arbitral proceedings which commenced on/or after the new Act came into force. It further bifurcated the first limb ::: Uploaded on - 30/06/2016 ::: Downloaded on - 22/08/ :19:52 :::

20 Dusane 20/71 chs into (a) provisions of the old Act shall apply in relation to arbitral proceedings commenced before the new Act came into force and (b) the old Act will not apply in such cases where the parties agree that it will not apply in relation to arbitral proceedings which commenced before the new Act came into force. It then interpreted the expression in relation to in following terms : The expression in relation to is of the widest import as held by various decisions of this Court in Daypack Systems (P) Ltd. (1988) 2 SCC 299, Mansukhlal Dhanraj Jain (1995) 2 SCC 665, Dharajamal Gobindram, AIR 1961 SC 1285 and Navin Chemicals Mfg, (1993) 4 SCC 320. This expression in relation to has to be given full effect to, particularly when read in conjunction with the words the provisions of the old Act. That would mean that the old Act will apply to the whole gambit of arbitration culminating in the enforcement of the award. If it was not so, only the word to could have sufficed and when the legislature has used the expression in relation to, a proper meaning has to be given. This expression does not admit of restrictive meaning. The first limb of Section 85(2)(a) is not a limited saving clause. It saves not only the proceedings pending at the time of commencement of the new Act but also the provisions of the old Act for enforcement of the award under that Act. It held that in this view of the matter, Section 6 of the General Clauses Act would be inapplicable. The other relevant factor that had weighed with the Apex Court while interpreting Section 85 2(a) was that, the two Acts i.e. the old Arbitration Act, 1940 and the new Arbitration Act, 1996 were vastly different from each other. There was a total regime change from the old Act and it's substitution with the new Act. ::: Uploaded on - 30/06/2016 ::: Downloaded on - 22/08/ :19:52 :::

21 Dusane 21/71 chs The total regime change would present serious practical difficulties in relation to the arbitral proceedings commenced under the old Act. The observations of the Apex Court in this regards are : 27. But then if the construction of the new Act leads to inconvenient and unjust results, the concept of a purposive approach has to be shed. Multiple and complex problems would arise if the award given under the old Act is said to be enforced under the new Act. Both the Acts are vastly different to each other. It has been rightly contended that when arbitration proceedings are held under the old Act, the parties and the arbitrator keep in view the provisions of that Act for the enforcement of the award. As noted above, under the old Act, there is no requirement for the arbitrator to give reasons for the award. That is not mandatory under the new Act. Section 27 of the old Act provides that the arbitrator or umpire may, if they think fit, make an interim award, unless of course a different intention appears from the arbitration agreement. An interim award is also an award and can be enforced in the same way as the final award. It would certainly be a paradoxical situation it for the interim award, though given after the coming into force of the new Act, it would still be the old Act which would apply and for the final award, it would be the new Act. Yet another instance would be when under Section 13 of the old Act, the arbitrators or umpire have power to state a special case for the opinion of the court on any question of law involved in the proceedings. Under sub-section (3) of Section 14 of the old Act when the court pronounces its opinion thereon such opinion shall be added to and shall form part of the award. From this part of the award no appeal is maintainable under Section 39 of the old Act. There is no such provision under the new Act. ::: Uploaded on - 30/06/2016 ::: Downloaded on - 22/08/ :19:52 :::

22 Dusane 22/71 chs Mr. Seervai while making extensive submissions on Thyssen's case has relied upon decision of Madras High Court in New Tirupur Area Development Corporation vs. Hindustan Construction Company Ltd. (A. No.7674 of 2015 in O.P. No.931 of 2015 judgment dated January 27, 2016) ( New Tirupur ), with a submission that Madras High Court has, in it's decision highlighted the difference between the language of Section 85(2)(a) of the Arbitration Act and the saving Section 26 of the Amending Act. According to him, the discussion in Thyssen's case also supports his arguments as regards the meaning to be given to the phrase to arbitral proceedings. 22 In the New Tirupur's case, the petitioner after filing the Arbitration Petition had filed an application for stay of the impugned award in view of Section 36(2) of the Arbitration Ordinance. Later he took a stand that by virtue of introduction of Section 26 in the Amendment Act, which was also deemed to have come into force on 23 rd October, Section 36(2) of the Arbitration Ordinance, which stipulated a condition of filing a separate application for stay has been taken away. According to the petitioner, the unamended provision of Section 36 of the Principal Act alone was applicable to the case on hand. The Madras High Court considered Section 26 of the Amendment Act, in comparison with Section 85(2)(a) of the Arbitration Act, several decisions cited before it and held as follows: 58 In Section 85(2) of the Principal Act, 1996, the positive legislature intent is to apply the provisions of the said enactments (Repealed), in relation to arbitral proceedings which commenced before 1996 Act, is ::: Uploaded on - 30/06/2016 ::: Downloaded on - 22/08/ :19:52 :::

23 Dusane 23/71 chs clear. The expression, in relation to is incorporated in Section 85(2) of the Principal Act, In contrast, Section 26 of the Amendment Act, deemed to have come into effect from 23 rd October, 2015, the expression in relation to has been deleted. The Legislature has also not incorporated the words, Court proceedings in Section 26 of the Amendment Act. and 67 When the legislature has expressly omitted the words in relation to arbitration proceedings in Section 26 of the Act, there is no scope for the Court to innovate or take upon the task of amending or altering the statutory provision. The structure and scope of the Arbitration and Conciliation Act, 1996 (Principal Act), has been amended, by incorporating new provisions by way of substitution and deletion. 23 The observations of the Apex Court in Thyssen's case on the possibility of use of the word to in the place of the words in relation to can be reversed and applied to the facts of the present case without disturbing the underlying principle. If the legislature desired to give wider scope to the first part of the Saving Section 26, it would have used the same expression as in the second part i.e. in relation to instead of it. In the circumstances by the necessary implication, the Section becomes exhaustive i.e. it covers within it's fold all the different proceedings arising out of the Arbitration Act. 24 The deliberate intention of omission can be inferred, also from the context of introduction of Section 26 in the Amending Act and the context of the amendments to Section 36 of the Arbitration ::: Uploaded on - 30/06/2016 ::: Downloaded on - 22/08/ :19:52 :::

24 Dusane 24/71 chs Act. It is significant to note that Report No. 246 of the Law Commission of India that recommended amendments to the Arbitration Act had recommended introduction of Section 85(A) tilted Transitory Provisions to the Arbitration Act. Section 85(A) had provided for prospective application of the Amending Act with three exceptions which exceptions read as follows : (a) the provisions of section 6-A shall apply to all pending proceedings and arbitrations. Explanation : It is clarified that where the issue of costs has already been decided by the court/tribunal, the same shall not be opened to that extent. (b) the provisions of section 16 sub-section (7) shall apply to all pending proceedings and arbitrations, except where the issue has been decided by the court/tribunal. (c) the provisions of second proviso to section 24 shall apply to all pending arbitrations. The Legislature had consciously dropped this recommendation from the Arbitration Ordinance. As rightly pointed out by Mr. Seervai had Section 85(A) been included in the Amending Ordinance or the Amending Act the amended Section 36 may not have been made applicable to post-award proceedings. Even when later, a saving provision came to be introduced in the Amending Act it was not in terms of recommended Section 85(A) but in the form of Section 26. In stead of almost all pervasive saving clause at recommended Section 85(A) a limited or restricted saving clauses at Section 26 is introduced. This would mean that the omission of all proceedings ::: Uploaded on - 30/06/2016 ::: Downloaded on - 22/08/ :19:52 :::

25 Dusane 25/71 chs except arbitral proceedings from the first part of Saving Section 26 is conscious and deliberate which implies that the amended provisions would apply to such proceedings. 25 The second context is the context of amendments to Section 36 itself. The original Section 36 imposed a disability upon a successful award-holder from enforcing the award during the pendency of the applications under Section 34 of the Arbitration Act. This prevented the award-holder from enjoying the fruits of his success merely because the unsuccessful award-debtor filed an application to challenge the award. As pointed out by Mr. Khambhata, this position of law was adversely commented on by the Supreme Court in National Aluminium Co. Ltd. v. Pressteel & Fabrications (P) Ltd. (2004) 1 SCC 540 in the following words : However, we do notice that this automatic suspension of the execution of the award the moment an application challenging the said award is filed under Section 34 of the Act leaving no discretion in the court to put the parties on terms, in our opinion, defeats the very objective of the alternate dispute resolution system to which arbitration belongs. We do find that there is a recommendation made by the concerned Ministry to the Parliament to amend section 34 with a proposal to empower the civil court to pass suitable interim orders in such cases. In view of the urgency of such amendment, we sincerely hope that necessary steps would be taken by the authorities concerned at the earliest to bring about the required change in law. This criticism was taken note of by the Law Commission at paras 43, 44 and 45 of it's 246 th report. ::: Uploaded on - 30/06/2016 ::: Downloaded on - 22/08/ :19:52 :::

26 Dusane 26/71 chs Section 36 of the Act makes it clear that an arbitral award becomes enforceable as a decree only after the time for filing a petition under section 34 has expired or after the section 34 petition has been dismissed. In other words, the pendency of a section 34 petition renders an arbitral award unenforceable. The Supreme Court, in National Aluminium Co. Ltd. v. Pressteel & Fabrications, (2004) 1 SCC 540 held that by virtue of section 36, it was impermissible to pass an Order directing the losing party to deposit any part of the award into Court. While this decision was in relation to the powers of the Supreme Court to pass such an order under section 42, the Bombay High Court in Afcons Infrastructure Limited v. The Board of Trustees, Port of Mumbai 2013(1) Arb LR 512 (Bom) applied the same principle to the powers of a Court under section 9 of the Act as well. Admission of a section 34 petition, therefore, virtually paralyzes the process for the winning party/award creditor. 44 The Supreme Court, in National Aluminium, has criticized the present situation in the following words : However, we do notice that the this automatic suspension of the execution of the award, the moment an application challenging the said award is filed under section 34 of the Act leaving no discretion in the court to put the parties on terms, in our opinion, defeats the very objective of the alternate dispute resolution system to which arbitration belongs. We do find that there is a recommendation made by the concerned Ministry to the Parliament to amend section 34 with a proposal to empower the civil court to pass suitable interim orders in such cases. In view of the urgency of such amendment, we sincerely hope that necessary steps would be taken by the authorities concerned at the earliest to bring about the required change in law. ::: Uploaded on - 30/06/2016 ::: Downloaded on - 22/08/ :19:52 :::

27 Dusane 27/71 chs In order to rectify this mischief, certain amendments have been suggested by the Commission to section 36 of the Act, which provide that the award will not become unenforceable merely upon the making of an application under section 34. The above object of the amendments to Section 36 can be fulfilled only by holding the Saving Section 26 exhaustive. 26 Mr. Dada argued that Section 34 of the Arbitration Act is akin to a right of appeal and therefore it is continuation of the arbitral proceedings. According to him legal pursuit of the remedy of arbitration all the way upto the appeal is one singular proceeding. The right to file application to challenge the award under Section 34 and the limits on enforceability of the award under Section 36 of the unamended Arbitration Act form a package of rights. This package of right became available to BCCI on the date of commencement of the arbitral proceedings under Section 21 of the Arbitration Act. That was several years prior to 23 rd October, 2015 when the unamended Arbitration Act was applicable. Therefore the amended Section 36 cannot be applicable to the applications of BCCI. 27 Mr. Dada seeks to draw support for the above submission from the decisions of the Apex Court in Garikapati v. Subbiah Choudhry and ors. reported in AIR 1957 S. C. 540, para 23 of the decision relied upon by Mr. Dada reads as under : From the decisions cited above the following principles clearly emerge : ::: Uploaded on - 30/06/2016 ::: Downloaded on - 22/08/ :19:52 :::

28 Dusane 28/71 chs (i) That the legal pursuit of a remedy, suit, appeal and second appeal are really but steps in a series of proceedings all connected by an intrinsic unity and are to be regarded as one legal proceedings. (ii) The right of appeal is not a mere matter of procedure but is a substantive right. (iii) The institution of the suit carries with it the implication that all rights of appeal then in force are preserved to the parties thereto till the rest of the career of the suit. (iv) The right of appeal is a vested right and such a right to enter the superior Court accrues to the litigant and exists as on and from the date the lis commences and although it may be actually exercised when the adverse judgment is pronounced such right is to be governed by the law prevailing at the date of the institution of the suit or proceeding and not by the law that prevails at the date of its decision or at the date of the filing of the appeal. (v) This vested right of appeal can be taken away only by a subsequent enactment, if it so provides expressly or by necessary intendment and not otherwise. 28 In Garikapati's case, suit had been filed against the appellant on 22 nd April, By the order dated 14 th November, 1950, the suit was dismissed. The plaintiff preferred an appeal against the order of dismissal. The appeal was allowed and the suit was decreed. The application for leave to appeal to the Apex Court was dismissed on the ground, inter-alia, that the value of the property was only Rs.11,400/- and did not come up to the amount of ::: Uploaded on - 30/06/2016 ::: Downloaded on - 22/08/ :19:52 :::

29 Dusane 29/71 chs Rs.20,000/-. In his application before the Apex Court, the appellant contended that the order being one of reversal of the judgment and the value of the property being above Rs.10,000/- he was entitled, as a matter of right, to go up to the Apex Court on Appeal in view of Clause-39 of the Letters Patent, 1865 relating to the High Courts of the three Presidency towns. Under that clause, an appeal could be taken to His Majesty in Council from any final judgment, decree or order of the High Court made on appeal or in exercise of its original jurisdiction by a majority of the full number of Judges of the said High Court or of any Division Court provided, in either case, the sum or matter at issue was of the amount or value of not less than 10,000 rupees or that such judgment, decree or order involved, directly or indirectly, some claim, demand or question to or respecting property amounting to or of the value of not less than 10,000 rupees. The appellant had contended that, as on the date of the institution of the suit, he had acquired a vested right to appeal to the Federal Court, which had since then been replaced by the Supreme Court. This vested right of appeal is a substantive right and could be taken away only by a subsequent enactment, if it so provides expressly or by necessary intentment and not otherwise. The Apex Court held that, the legal pursuit of a remedy, Suit, Appeal and Second Appeal are really but steps in a series of proceedings, all connected by an intrinsic unity and are to be regarded as one legal proceeding. In the facts of that case, the Apex Court noted that the Constitution of India by Article 395 repealed the Government of India Act and thereby abolished the Federal Court. It, however, continued the Abolition of ::: Uploaded on - 30/06/2016 ::: Downloaded on - 22/08/ :19:52 :::

30 Dusane 30/71 chs Privy Council Jurisdiction Act, 1949, which directed that the Federal Court in addition to its other powers, would have the appellate powers exercised by the Privy Council. The adaptation order modified Sections 109 and 110 of the Code of Civil Procedure, interalia, by raising the valuation of Rs.10,000/- to Rs.20,000/-. The provision, however, by virtue of Clause-20 of the order, did not affect any right, privilege, obligation or liability already acquired, accrued or incurred under any existing law. The Apex Court, held that the true implications of these provisions was that the pre-existing right of appeal to the Federal Court for the appellant before it, continued to exist and the old law which created that right of appeal also continues to exist to support the continuation of that right and the Federal Court having been abolished, the Supreme Court was substituted by the Federal Court as the machinery for the purpose of giving effect to the exercise of that right of appeal. 29 The second decision cited by Mr. Dada is in Videocon International Limited Versus. Securities and Exchange Board of India, reported in (2015) 4 Supreme Court Cases page 33. In the facts of that decision, an amendment was made to Section 15-Z of the Securities and Exchange Board of India Act, 1992 with effect from 29 th October, 2002 whereby, (i) the forum of appeal against orders of the Securities Appellate Tribunal was changed from the High Court to the Supreme Court; and (ii) the questions on which such appeals could be filed was changed from any question of fact or law to any question of law. The High Court held that the amended Section 15-Z would not ::: Uploaded on - 30/06/2016 ::: Downloaded on - 22/08/ :19:52 :::

31 Dusane 31/71 chs apply to appeals already filed prior to 29 th October, 2002 but all appeals filed in the High Court after that date were not maintainable. The two questions considered by the Apex Court in the decision cited were, (i) whether an order passed by the Securities Appellate Tribunal prior to 29 th October, 2002 would be appealable under the unamended Section 15-Z before the High Court or under the amended Section 15-Z before the Supreme Court; and (ii)whether the date on which the appeals had been filed in the High Court was a relevant consideration. The Apex Court held therein that, an appellate remedy is available under different packages. It can be availed of only when it is expressly conferred. When such a right is conferred, its parameters are also laid down. A right of appeal may be absolute, i.e. without any limitations or it may be a limited right. At para-39 of the decision, the Apex Court further held: As illustrated above, an appellate remedy is available in different packages. What falls within the parameters of the package at the initial stage of the lis or dispute, constitutes the vested substantive right of the litigant concerned. An aggrieved party, is entitled to pursue such a vested substantive right, as and when, an adverse judgment or order is passed. Such a vested substantive right can be taken away by an amend-ment, only when the amended provision, expressly or by necessary intendment, so provides. Failing which, such a vested substantive right can be availed of, irrespective of the law which prevails, at the date when the order impugned is passed, or the date when the appeal is preferred. For, it has repeatedly been declared by this Court, that the legal pursuit of a remedy, suit, appeal and second appeal, are steps in a